The need for the emergence of markets has been evident since ancient history. Markets have developed over time as the specific needs of participants have evolved. In recent times, with the development of industry, technology, and techniques, financial markets have become increasingly important. They provide the fundamental basis for financing the economy of a particular country. With the advent of the internet, financial markets have also become global. The main task of financial markets is to redirect savings towards investments that lack capital. Financial markets trade in various types of securities depending on the needs of the participants. The most dynamic part of financial markets is the capital market. It is subject to various external influences, including changes in other markets as well as non-economic factors. The aim of this paper is to explain the concept of the capital market, its types, and institutions. It aims to present the development and explore all characteristics and specificities of the capital market in the Republic of Croatia. By comparing trading volumes and market capitalization with stock exchanges in the region, the paper will attempt to determine whether the claims that the capital market in the Republic of Croatia is underdeveloped and unattractive to investors are valid.